Homes shortage raises asking prices

Asking prices rose by 0.6% during September as property values continued to be supported by a lack of homes on the market.

The average property put up for sale in England and Wales during the five weeks to September 12 cost £223,996, only 1.5% less than in September 2008, according to property website Rightmove.

In some areas of the country asking prices are already higher than they were a year ago, with prices up 1.5% in East Anglia and 0.4% in the South East, while in the South West they are only 0.1% lower and in London they are down by 0.9%.

But the market is continuing to be dogged by a lack of supply, with 10 properties coming off the market for every eight that are put up for sale.

As a result, estate agents have the lowest level of stock per branch since February 2008, with an average of just 69 unsold properties on their books, down from figures in the 70s for the past 17 months.

The group added that the fall in stock levels was even more severe than it first appeared, as there were around 20% fewer estate agents branches now compared with a year earlier.

Around 23,000 new homes are coming on to the market in England and Wales each week, the equivalent of around 1.2 million a year, nearly half the historic average of around two million properties a year.

Rightmove said the lack of choice in popular areas, combined with the high deposits lenders were demanding, was putting off many homeowners from trading up the property ladder.

Miles Shipside, commercial director of Rightmove, said: "The recession appears to have hit prices harder in the north, and this is compounded by lenders' more conservative attitude to risk.